Capital Gains Tax (CGT)

If you would like to discuss any of the issues outlined below, please contact us.

CURRENT YEAR PLANNING FOR INDIVIDUALS

If you are going to make capital gains in the current tax year, you should take action as soon as possible, at any rate before 5 April.

The earliest planning will increase your chances of avoiding having to face a large tax bill on 31 January 2019.

CGT ON THE SALE OF YOUR BUSINESS

If you qualify for entrepreneurs’ relief on gains relating to the sale of business assets (which now have a £10 million lifetime limit), the tax is charged at 10%.  If you do not qualify for the relief you will now pay CGT at up to 28%.  This means that it is now of the utmost importance to protect your entitlement to the relief on a business sale.

Essentially you could sell your business and receive the proceeds in one of several ways:

  • Cash of a fixed amount
  • Cash plus the right to receive more if profit targets are met (= earn-out arrangement)
  • Shares in the purchasing company
  • Loan notes in the purchasing company

There may also be a combination on offer from the above but whatever may be on the table it is vital that the sale is structured from your viewpoint to get the best tax treatment, as that can vary significantly. Not that tax should be the prime motivation as you should never let "the tax tail wag the commercial dog". 

There are several ways of ensuring that the complete package on a sale of your business qualifies you for entrepreneurs’ relief, depending on your particular circumstances.

CGT AND INHERITANCE TAX PLANNING

NON RESIDENT CGT (NRCGT)


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